Traders on Polymarket now see almost no chance the Federal Reserve will cut interest rates at any point next year, with the contract pricing zero cuts for the remainder of 2026 at 95.9% as of October 6. The shift follows a September quarter-point increase that lifted the target range to 3.75%–4.00% and updated Fed projections pointing to still-higher borrowing costs by year-end.
The wager, which closes January 1, 2027, counts actual reductions in the federal funds rate. A hold through December would also resolve as zero cuts, since no reduction would have occurred. So would another hike.
What moved the odds
August personal consumption expenditures inflation came in at 3.4% year over year, below the 3.7% consensus in a Reuters economist poll. The softer reading prompted Goldman Sachs and several other brokerages to push their expected next quarter-point hike from October to December. Goldman also said it sees a strong chance the Federal Open Market Committee will eventually decide no further increases are needed.
Even so, rate-cut expectations have evaporated. CME FedWatch put October hike odds near 38% on October 6, down from almost 71% a week earlier. The zero-cut Polymarket contract has $53.9 million in total volume and $4.18 million in liquidity, with the top price slipping just 0.1 percentage point over 24 hours.
The Fed's own projections
The September dot plot showed the median federal funds rate at 4.1% by year-end, with most participants anticipating at least one more increase. The primary market description cited solid economic expansion, unemployment around 4.1%–4.2%, and core inflation near 3.4% as reasons a restrictive stance remains plausible.
Those figures sit behind the zero-cut consensus. If the Fed does move again, the number of cuts stays at zero and the contract resolves accordingly. If it holds, same result.
What could still change the picture
The October and December Fed meetings are the next scheduled decision points, bracketed by fresh inflation and labor market reports. Any of those could shift the calculus. The zero-cut price is already near its ceiling — at 95.9%, it has little room to rise — but the remaining 4.1% reflects the possibility of a sharp economic turn that forces the Fed to reverse course.
For now, the market's message is blunt: after a September hike and with inflation still above target, traders aren't betting on relief in 2026. The Polymarket event closes January 1, 2027, by which time the FOMC will have met eight more times. Each meeting, and each data release in between, will test whether that 95.9% holds.
